ADVANCED: Should the bitcoin blockchain be used for anything other than moving bitcoin around?

00:02 Everyone, this is an advanced video. So, 00:04 if you are not an advanced Bitcoin user, 00:06 you can skip this one. Just ignore it. 00:08 Not relevant to you, etc., etc. All 00:10 right. So, the question, which is a 00:12 hotly hotly hotly debated thing in the 00:15 world of uh advanced Bitcoin users, is 00:18 whether the Bitcoin blockchain should be 00:20 ever used for anything other than 00:22 transferring Bitcoin around. Um, so the 00:25 Bitcoin blockchain is a database. It's 00:27 it's a database that keeps track of how 00:29 much Bitcoin everyone has, which is a $2 00:32 trillion valuable sort of thing. So, it 00:35 is the most valuable single database in 00:37 the world, which is who owns what of 00:40 Bitcoin, and that's it primary use. But, 00:42 inevitably, technology being the 00:45 flexible thing it is, people figured out 00:47 how to do creative things with it. So, 00:50 uh it is possible to etch uh other 00:53 information into the Bitcoin blockchain 00:55 other than just monetary transactions. 00:58 Now, I won't go all into all the details 01:00 of how people have figured out how to do 01:02 that. Um but I'll I'll just use a simple 01:06 illustration. So um this this the the 01:08 terminology people often use for these 01:10 things like uh uh is you know people 01:13 using operturn or people using um 01:16 ordinals or inscriptions or you know all 01:19 sorts of stuff. But let me give you an 01:20 example of how you could etch something 01:22 in the Bitcoin blockchain. So right now 01:25 the smallest unit of a Bitcoin is a 01:27 Satoshi which is 1/100 millionth of a 01:29 Bitcoin. Almost nobody moves Satoshi's 01:33 around individually or in super small 01:36 units because it makes no sense to pay a 01:38 40 cent transaction fee to move on 01:40 one/10enth of a cent of value. Let's 01:43 assume I wanted to use the Bitcoin 01:45 blockchain to spell something. Let's say 01:48 I wanted it to spell I love Rachel, my 01:51 wife. Uh she's great. She's fantastic. 01:54 And I wanted to spell I love Rachel on 01:57 the Bitcoin blockchain. Well, how could 01:58 I go about doing that? Well, for 02:00 example, I could each letter of the 02:02 alphabet I could assign 1 through 26 and 02:05 I could do I could move a transaction 02:07 with nine Satoshi's for the letter I. 02:10 And then I could do a transaction with 02:12 12 Satoshi's for the letter L. And then 02:15 15 Satoshi's for the letter O. And uh I 02:18 think it's 22 Satoshi's for the letter 02:21 V. Something like that. And then five 02:24 Satoshi's for the letter E. So I love 02:26 Rachel. 18 Satoshi's for the letter R. 02:29 one Satoshi for the letter A, three for 02:31 the letter C, uh, eight for the letter 02:34 H, five for the letter E, and 12 for the 02:37 letter L. Anyway, um, maybe I messed up 02:40 either the order of those letters or or, 02:43 uh, the, you know, increment on the 26 02:45 letters. 02:46 If you saw the Bitcoin blockchain and 02:48 you saw the same Bitcoin user, even 02:50 though you didn't know it was me, you 02:52 saw the same, you know, somebody who 02:54 owns, you know, a tenth of a Bitcoin 02:56 start making a bunch of small 02:58 transactions like that and you strung 03:01 them all together and you figured nobody 03:02 moves tiny little bits of Bitcoin around 03:05 in such small units. And you started 03:07 adding them up and you said, "Oh, you 03:09 know, I see what he's doing here. He's 03:11 using 1 through 26 Satoshi's to spell 03:15 letters and he has spelled I love Rachel 03:17 in the Bitcoin blockchain. Well, there's 03:19 no way you anybody can stop me from 03:21 doing that because you don't know I'm 03:22 spelling I love Rachel. What if I was 03:24 paying somebody nine Satoshi's for 03:27 something which is less than one penny? 03:30 What if I just wanted to pay someone on 03:31 the internet less than one penny to do 03:33 something for me or to thank them for a 03:36 message on the messaging platform Noster 03:38 and I just wanted to zap them some sats 03:41 and I just happened to zap them nine 03:43 sats and then I zapped the same 03:46 person 12 sats. You don't know that I'm 03:49 spelling the letter L the 12th letter of 03:51 the alphabet or am I just spending 12 03:54 sats? Anyway, there's a lot more 03:56 sophisticated and complex ways of doing 03:58 it versus something simple like that. 03:60 But the bottom line is you can't stop 04:02 people from making the Bitcoin 04:04 blockchain do things and say things 04:06 because it moves monetary value and you 04:09 can use that monetary value to represent 04:11 other things. One of the most 04:13 significant was a year or two back. The 04:17 uh the government of Guatemala used the 04:19 Bitcoin blockchain to etch vote totals 04:22 into the Bitcoin blockchain as the votes 04:25 were coming in from the remote provinces 04:27 of Guatemala so that they could not be 04:30 manipulated later. So, you know, you've 04:32 got this, you know, this remote province 04:35 and it's 27 votes for one person and 46 04:38 votes for another person. they etched 04:40 that onto the Bitcoin blockchain like 04:42 every hour or whatever it was so that 04:46 when all the votes got mixed together 04:48 they're at headquarters and somebody 04:50 allocated a different vote total than 04:52 that because there's all sorts of 04:53 electioneering that happens often in 04:56 countries uh in lots of countries when 04:59 all that electionering happening 05:01 happened you couldn't go back and change 05:03 the vote totals because the Bitcoin 05:05 blockchain which is this absolutely 05:06 immutable record says 05:09 This is how many votes came from each 05:11 province at 8:00 p.m., you know, 8:00 05:14 a.m., 9:00 a.m., 10:00 a.m., 11:00 a.m., 05:16 12:00 a.m. or 12:00 p.m. 1 p.m. You 05:19 can't go back and change those because 05:21 all of those are indelibly, unchangeably 05:23 etched into the Bitcoin blockchain. Now, 05:26 is that a valuable use of the Bitcoin 05:28 blockchain? It is. But people who are 05:31 monetary purists have a lot of heartburn 05:34 about the Bitcoin blockchain including 05:36 any data in it that is not purely 05:39 financial transactions. Uh personally I 05:42 think it's pretty cool that you can do 05:45 you can do small things. You can't do 05:46 big things in the Bitcoin blockchain 05:47 because it's limited to uh one uh the 05:51 way it's limited is effectively between 05:53 one and four megabytes per 10 minutes. 05:55 So there's not much you can do there. 05:57 You can't stream an entire movie. You 05:60 can barely even uh you know embed 06:02 images. If you do try to embed an image 06:04 into the Bitcoin blockchain, it it's 06:06 very pixelated, very basic, like it 06:09 can't it can't store large amounts of 06:11 information, but it can store vote 06:13 totals from a Guatemalan election. It 06:15 can store short messages and things like 06:18 that. But of course, you have to pay 06:19 transaction fees. So, um if I wanted to 06:22 spell I love Rachel, every character is 06:24 going to cost me 40 cents right now. 06:26 Well, that's a very expensive message by 06:28 the time you're writing out if you try 06:30 to write something long in the Bitcoin 06:31 blockchain, it gets very expensive and 06:33 you're basically paying all of that to 06:35 the Bitcoin miners to include those uh 06:38 transactions in the blockchain just like 06:40 you would pay the Bitcoin miners if you 06:42 were paying them to include any other 06:44 message in the blockchain. So, my view 06:46 is there's nothing you really can do 06:48 about it. I mean, the Bitcoin blockchain 06:49 can be used however people want to use 06:51 it as long as they pay the transaction 06:53 fees. The fact that there is some 06:55 messages in there and vote totals from 06:57 Guatemala alongside financial 06:60 transactions is so what you know there's 07:02 a limit to how big the Bitcoin 07:03 blockchain can be every 10 minutes 07:05 anyway. So there's a you know there's 07:07 not there's not there's not a way for it 07:10 to end up bloated with a ton of stuff in 07:12 it because again by definition it's 07:15 limited to between 1 megabyte and 4 07:17 megabytes per 10 minutes which in a 07:19 world of gigabit Ethernet is is you know 07:22 frankly a very tiny amount. So anyway I 07:25 think the whole thing the whole you know 07:27 extremely heated argument about it is 07:29 basically a nothing burger. A nothing 07:31 burger meaning it's nothing. It means 07:34 people are going to debate it all day 07:35 long and I just think it doesn't matter. 07:37 The Bitcoin blockchain by its nature 07:40 cannot end up bloated because of the 07:42 space limitations that are set by the 07:44 protocol. And if some people want to 07:46 from time to time include messages or 07:50 include any other information, so be it. 07:53 It's it's not really hurting anything in 07:55 any meaningful way. And there are very 07:57 valuable uses again like the Guatemalan 07:60 election and things like that where it 08:02 actually is extremely valuable to have 08:03 something like that etched forever in a 08:06 way that humans cannot change it to rig 08:08 a system. So hope hope that helps. 08:09 Thanks everyone.